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More bad news on Health Connector website

The Lowell Sun

Updated:
03/17/2014 04:03:53 PM EDT

By Matt Murphy

STATE HOUSE NEWS SERVICE

BOSTON -- Massachusetts plans to sever ties with the contractor responsible for the broken Obamacare website, has been ringing up $10 million a month in unexpected enrollment costs tied to the site's failure, and officials now estimate they may not have a fully functional online marketplace until October.

Sarah Iselin, Gov. Deval Patrick's special assistant in charge of the Health Connector Authority's website fix, told the Connector Board at a meeting on Monday that negotiations were underway to end the state's contract with Canadian vendor CGI. The company has been working with Iselin's team and the information technology firm Optum, brought on board as a consultant, to put the website back on track.

"We have made the decision that we are going to be parting ways with CGI," Iselin said.

Iselin said the administration is weighing its long-term options, but will most likely try to rebuild non-functioning portions of the website, including its health insurance eligibility determination system, with a new vendor. Though leaders have ruled out starting from scratch on a new site or continuing the course with CGI, the other option involves trying to leverage pieces of another state's web exchange or the federal government's software.

"The picture that we're painting is that we have a long way to go," she said.

CGI's contract with the state, worth $69 million, was due to run until September. So far, the state has paid about $15.

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9 million to CGI, and officials said it will be unclear how much more the state will pay or if any money can be recouped until negotiations with CGI for the transition to a new vendor are complete.

In addition to reaching agreement on which parts of the contract were fulfilled, the state must also negotiate with CGI for access to parts of the computer code written for the state that may be considered proprietary.

"CGI has worked tirelessly to deliver a health insurance exchange for the residents of Massachusetts. We will work with the Commonwealth to ensure a smooth transition to the next phase of exchange deployment, allowing for the best use of system capabilities already in place," CGI spokeswoman Linda Odorisio said in a statement.

With the fully functional site not expected to be ready until the fall - a full year late but in time for the next open enrollment period starting Nov. 15 - Iselin said the state will have to seek another extension from the federal government beyond June 30 to continue providing coverage through subsidized Commonwealth Care plans. All five carriers have agreed to continue coverage through June.

The request to the Centers for Medicare and Medicaid Services for the further extension has not yet been made, but Iselin said she spoke by phone over the weekend with CMS Deputy Administrator and Medicaid Director Cindy Mann and reported that CMS remains committed to working with the state.

Republican Charlie Baker, who has repeatedly said Massachusetts should seek a full waiver from the ACA even though the Obama administration has rejected more limited waiver requests, said the development was troubling.

"This is more bad news for taxpayers and for the many Massachusetts families that are dealing with uncertainty about whether they can access a doctor and how to pay for it," Baker said in a statement. "In less than a year, Massachusetts has wasted millions of dollars and gone from having one of the best healthcare websites in the nation to having one of the worst."

Administration and Finance Secretary Glen Shor told the Connector board that the cost of continuing Commonwealth Care plans instead of enrolling subsidized subscribers into new Affordable Care Act compliant plans is roughly $10 million a month. The costs have been accruing since January, and will continue until at least the summer when officials hope to be able to begin assigning people to their permanent plans.

The additional cost is due mostly to the state's inability to take advantage of federal subsidies available under the Affordable Care Act for insuring special status immigrants, who have legally resided in the country for less than five years. Shor said revenues used to fund the Connector Trust Fund this fiscal year have been greater than expected, which he said would help to "neutralize" the unanticipated expense.

Officials said it is more difficult to calculate the cost of the providing transitional coverage through MassHealth for Obamacare applicants who have been unable to enroll in final plans, and total expenses will depend on total population, the duration of enrollment and the utilization of services.

The state has currently placed 84,000 individuals in temporary MassHealth coverage through June 30, and Shor said the state will get reimbursed at the full 75 percent level by the federal government for those who ultimately end up in MassHealth. Though early March, MassHealth has paid $7.3 million in claims on those enrolled in temporary coverage.

The state has also applied for federal grant funding and started working with the Information Technology Division to make capital funds available to pay for Optum, who was brought on to provide technical expertise for fixing the website and to provide labor for data entry to clear the backlog of unprocessed insurance applications.

Optum's services are expected to come in under budget for February at around $5.3 million, but the state anticipates the cost to escalate in March to $11.1 million as employees have been added.

As Connector officials have worked to process a backlog of applications for subsidized coverage and enroll applicants in temporary coverage, Iselin said the premium placed on speed to prevent lapse in coverage for individuals means some people with incomes above 400 percent of the poverty level may have slipped through the cracks. The federal government will not reimburse the state any portion of coverage for those individuals.

"This is an incredible level of exposure for Massachusetts," Iselin said, vowing to make income verification a near-term priority.

According to a timeline outlined by Iselin, Connector officials hope by May to develop workarounds so that members can make simple updates to their health coverage options based on "life changes," such as pregnancy, marriage or change of address. The staff also hopes in May to weed out anyone in subsidized coverage who earns too much to qualify, and by June hopes to have an eligibility determination system tested and functional to begin transitioning residents to their final ACA plans.

Iselin and Connector staff reported some progress on improving the consumer experience on the website and through call-centers, and said the backlog of applications has been whittled to 21,000 after processing 27,000 applications in the past week and reducing the per-application data-entry time to 27 minutes.

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